President Radev: Sale of CEZ Assets "Cover-up of Actual Buyer"

Sofia, February 27 (BTA) - President Rumen Radev assumes that the controversial sale of CEZ Group's Bulgarian assets to a small local company is a cover-up of the actual buyer. Thus he joined the choir of voices which express concern over the deal with Inercom Bulgaria.

Radev told reporters that CEZ is part of the national and European critical infrastructure directly linked to national security, and that any claim that this is a trivial sale of a company is a misrepresentation.

Radev said: "The question is who is hiding their intentions and why. How did a company without history, experience, capacity or resources receive a huge bank guarantee, and why are the names of the banks - the most transparent public institutions - kept secret?" He also asked if the company had "political guarantees". "The government owes answers to all customers who pay electricity bills, i.e. all Bulgarian citizens. We are all waiting for answers," he said.

The lightning resignation of Energy Minister Temenouzhka Petkova after it transpired that she had known Inercom's sole owner Ginka Vurbakova for many years did not close the case; on the contrary, it raised even more questions, said Radev.

Asked what he himself can do to cast light on those questions, Radev said he had been meeting with the responsible institutions. He will be meeting with the chair of the Financial Supervision Commission on Tuesday and has already talked with the State Agency for National Security (SANS).

Asked if he is going to hold a meeting of the Consultative Council on National Security on the grounds that the deal is directly linked to it, the President said he was still gathering information.

Asked if the State has a mechanism to halt a deal which has given rise to so many questions, Radev said the State had regrettably given up this role in 2012 when it decided to sell its stake in the electricity distribution companies.

Regarding the authority which can intervene, Radev said the matter rests with the government because all those agencies and services report to it. He said he expected those institutions to protect the public interest and national security with adequate actions. The mechanism of the deal's financing is unclear yet, whether it is only banks that are involved, he commented.

In recent interviews with Bulgarian media, Ginka Vurbakova has declined to disclose the name of the bank which will finance the deal, citing a confidentiality clause.

SANS is working on the matter but it will take time, said Radev. "The big problem is that such checks are not done in advance, although the potential future owners have been known for months," he commented. A check after the fact cannot have a great impact on the deal, which has practically been closed. He said the Energy Ministry and SANS are the institutions responsible for national security by law.

Radev also asked if the checks had not been done for lack of competence or of professionalism, or for some other reason.

Energy and Water Regulatory Commission Chairman Ivan Ivanov told a news conference on Tuesday that the regulator cannot check the sale of the assets to Inercom Bulgaria and that it can pronounce only on the company's licence.

The deal has not been finalized yet. There is only a preliminary agreement and if the sale is finalized, the regulator has very clear powers for ex-ante, running and ex-post control of the energy company irrespective of its new owner, said Ivanov.

The regulator can conduct a check in two cases: first, if a self-contained part of a licensed company is sold (which is not the case now) because companies are sold in their entirety; and second, if the buyer pledges, fully or partly, tangible assets used to carry out the company's licensed activity.

Meanwhile, the Interior Ministry said it had not run checks on Vurbakova or her husband.